Word: mgm
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Dates: during 1990-1999
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...news, $3.4 billion movie-loan portfolio (last month the bank wrote off a third of those loans), to find new investments and, Ovitz hopes, to sell the studio. In the view of Jeff Berg, who runs rival International Creative Management, Ovitz's arrangement makes him crypto-chairman of MGM, which represents an untenable -- and perhaps illegal -- conflict of interest. "I want to solve it politically within the industry," Berg said last week, backpedaling from his initial talk of legal action. But he intends to keep the pressure on CAA and Ovitz. "He didn't think I'd call...
Will CAA clients get special treatment from MGM, as Berg suggests? Or will the opposite happen, with MGM getting sweetheart deals for the actors and directors and writers whom Ovitz's agency represents? And when the bank finally gets around to selling MGM, will Ovitz's insider knowledge give him an unfair edge in making or avoiding deals for his clients with the studio...
...simplest reason for all the extracurricular work may be the strongest: Hollywood remains in a deep recession, and the agency will earn more from one Matsushita-MCA deal than a whole lifetime of 10% fees from Kevin Costner. If Ovitz is able to unload MGM at a decent price, according to a knowledgeable source, Credit Lyonnais will probably pay him north of $30 million. Plus, as long as he has his main talent-peddling business going strong, Ovitz can very profitably cherry-pick in the secondary realms. He can create an ad campaign here and arrange a corporate acquisition there...
Among those whom Ovitz's arrangement with Credit Lyonnais took by surprise was Alan Ladd Jr., the chairman of the bank's MGM studio. "By the time the bank told me about the deal," Ladd says, "it was a fait accompli." He seems tentative about the whole thing. "I don't think MGM is for sale at this time." However, CAA sources confirm that Ovitz is indeed out to find a buyer...
...Dufour, a director of the Credit Lyonnais, dismisses the fears of Ovitz's critics who fret about conflicts of interest. Ovitz will meet with the bankers often, maybe monthly, but Dufour says Ovitz will wield no operational power over the studio. "Absolutely not. False -- completely wrong," he says. "MGM has its own management. MGM makes its own decisions. We do not tell it what to do; nor will anyone else." His presence, however, will inevitably be felt by studio executives and by moviemakers cutting MGM deals...